The Double-edged Sword of Smart Services

“You can buy a car in any colour you like ‘so long as it’s black’”, is the famous statement by Henry Ford, made at the beginning of the 20th century, a time when sellers dictated the market. Things couldn’t be more different today. It’s the customer who’s in the driver’s seat, and their experience is key.

During an online Breakfast Booster on 12 November, Lisa Brüggen, Professor of Financial Services at Maastricht University, takes the audience through the opportunities and pitfalls of customer experience and smart customer interactions. Lisa opens with a definition of customer experience. “It’s ‘a holistic judgement of all elements influencing a customer’s perception of a service, product or company, over the entire customer experience’. The difficulty is that so many different aspects matter in customer experience.”

Adequately managing Customer Experience (CX) is crucial to remaining competitive. 93% of business leaders report that delivering relevant and reliable CX is critical to business overall in order to remain competitive. Marketing experts have named it the fundamental basis of marketing management. But what is CX exactly, and why is it so important? Lisa explains four of the most important aspects of CX, “First: all online and offline touch points along the customer’s journey. What is especially difficult is the fact that more and more of those touch points are now in the hands of the customer.”

The second aspect is the customer journey. Lisa stresses, “it is not just the journey during the consumption of the product that matters, but also the pre- and post-purchase activities. A good example of a company that is going out of its way to give the customers the experience they expect throughout their journey, is Disney. A few examples: an app to plan your visit, a wrist band to facilitate purchasing and to avoid queues, and – the one to remember – the promotion of a picture of all the fun you’ve had.”

CX’s third aspect is its multidimensionality. Customers evaluate an experience in many different ways, and a variety of factors come into play. Lisa illustrates this by hotel evaluations as opposed to the evaluations received by Airbnb. Both companies deliver a ‘bed’, but the aspects that matter in evaluating what has been provided, are completely different. “It’s important to understand what matters most for the customers of your particular product or service.” Last but not least, the fourth aspect: context. Individual and situational aspects may have an impact on the experience of a customer.

Lisa explains the difference between traditional and smart services. “On the one hand, smart services are more challenging. In an online world a competitor is only one click away and it is much easier to compare offers and prices. Because online and offline services are integrated, you have to manage the entire journey over multiple channels. To make things even more difficult: there are many customer-controlled touch points over which you have little or even no control, but that still play a role in how your service will be evaluated.”

There is, however, another side to this. Lisa argues that smart services offer many new opportunities. “In the online world there are a lot of new ways to target your customers. Tons of data allow you to derive information about the behaviour of customers, offer the opportunity for micro-segmentation, and create a much more personalised approach. Based on the information you have about your customers, you can cater to their individual preferences. It’s true that the competition is only a click away, but there are ways to ‘lock-in’ customers so that they don’t click away as much as you would perhaps expect. Research shows that, once customers know and trust your organisation, they tend to be quite loyal even in an online environment. And then, of course, a lot of new opportunities are being created through technology. Think of smart assistants, service robots, and AR (Augmented Reality) and VR (Virtual Reality). AR/VR can aid customers in the decision-making process by taking away certain worries or questions that people making an online purchase may have.”

What should we do then, to enhance our customer’s experience? Some clear recommendations were put forward: “Put the customers at the centre, step into their shoes and convince the entire organisation to do the same. Use design thinking or design-based methods such as personas, videos and storyboards, journey maps and more, to help with this. These methods offer insights into the real problems; which is often not the product itself, but the logistics behind the product, IT services or other back-end functions.” Lisa also recommends focusing on ‘a shared sense of service excellence’ rather than highly specific skills or scripts. “What is needed is not a skill or competence, but something more like a mind-set or culture. One last piece of advice, don’t track traditional metrics, as they tend to be retrospective. The focus should shift towards a more forward looking system, based on improving the customer experience.”

And as a final takeaway: “Create momentum fast and set your sights high.”

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